Price drop on beer pitchers could backfire, B.C. pub industry warns

Larry Pynn, Vancouver Sun07.26.2014

Pitchers of beer in a downtown pub in Vancouver. The B.C. government has set new minimum prices for happy hour pitchers of draft beer at 20 cents per ounce -- after discovering that the price set last month at 25 cents would have forced some bars to raise prices.NICK PROCAYLO
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Happy Hour just got a little happier. The B.C. government on Friday announced it is establishing a minimum price of 20 cents per ounce for draft beer and cider servings of 50 ounces or more — equating to $12 for a standard 60-ounce pitcher.PNG files
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The B.C. government has reduced the minimum price for pitchers of beer, after complaints its first stab at pricing would have forced many pubs to increase their retail prices.

But the new price, announced Friday, means there is a price differential between beer sold in pitchers and beer sold in pints. That may encourage bar patrons to drink excessively simply to get the best possible deal, a representative of the bar and pub industry warned Friday.

Jeff Guignard, executive director of the Alliance of Beverage Licensees, said in Vancouver that the province now requires establishments to charge at least 20 cents an ounce for draft beer and cider in servings of 50 ounces or more — which is $12 for a standard 60-ounce pitcher.

The province has also dictated that a 20-ounce pint of beer must sell for at least $5 — which amounts to 25 cents an ounce. That difference may encourage patrons to order more pitchers and wind up drinking more than they had intended.

“That becomes a concern for us when we’re trying to ensure all our customers are drinking responsibly and getting home safely,” said Guignard, noting the national average for a pint of beer is 16 cents an ounce. “That’s kind of one of the unintended consequences and that’s a concern for us.”

Stuart Bertrand, spokesman for the Ministry of Justice, noted that by law in B.C. a single serving of beer cannot exceed 24 ounces, meaning that an individual cannot legally order a pitcher. Two patrons, however, could share successive pitchers.

Just last month, the province had set a minimum price of 25 cents an ounce for pitchers of beer — a formula that would have forced some pubs to raise their prices. In response, the province announced its new minimum prices on Friday.

The problem remains for those pubs currently charging less than $5 a pint that will have to raise their prices.

Ian Tostenson, president of the B.C. Restaurant and Foodservices Association, gave the government credit for changing the price structure on pitchers and said the majority of restaurants already charge more than $5 for a pint of beer. He also said it is not unreasonable that the per-ounce costs goes down when customers order a larger amount of beer.

“The thing with liquor is you never win,” he said. “It is impossible to find the right price, the right regulation.”

On another pricing issue, Guignard said that when the province originally announced its minimum prices on June 20 — consistent with authorizing pubs to offer discounted drinks during happy hour — it stated a minimum for spirits of $3 an ounce. The province issued a correction on June 24, he said, changing it to $3 for 1.5 ounces — and on Friday reverted to $3 an ounce.

“You get why our guys are scratching their heads,” he said. “It’s embarrassing, frankly, for everyone. It’s really confusing for customers. They come into a bar and don’t know what to expect.”

Bertrand said the change to 1.5 ounces was made to “align with Canada’s national drinking guidelines.” He cited a Canadian Centre on Substance Abuse document saying that “a drink” is defined as 1.5 ounces of distilled alcohol.

Bertrand said that while revisiting the minimum price for draft beer, the government found that “in most other provinces a standard drink is one ounce rather than 1.5 ounces. Reverting to $3 an ounce ensures B.C. is more aligned with the approaches taken by other provinces.”

Guignard complained that the back-and-forth pricing system puts an unreasonable burden on pubs, including changing menus, and that the province should do its homework.

“Changing the minimum price three times in a month is not helpful,” he said. “It’s the business decisions, the lack of clarity and lack of stability in the pricing structure. We’d appreciate when they set these prices, they need to be well thought out and consult with us before announcing them.”

Happy hour, with reduced prices, can occur at any time during the business day as determined by individual bars, pubs, and restaurants.

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